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    SanDisk: Deutsche Bank Boosts Rating To Buy; Ups Estimates

    sandisk logoSanDisk shares are trading higher Tuesday morning after Deutsche Bank analyst Bob Gujavarty raised his rating on the flash memory specialist to Buy from Hold. The analyst raised his 2011 EPS estimate for the company to $4.25, from $3.31; his price on target on the stock is $55. The stock closed last week at $42.80.

    The analyst writes that he now thinks the company's margins "will become far more sustainable in 2012" thanks to a combination of balance industry supply growth and SanDisk's leadership in TLC (triple-level cell) NAND flash memory chips.

    Gujavarty writes that concerns about NAND over-supply for the second half of this year and for 2012 "are not warranted."

    "The NAND industry has shown surprising restraint on new wafer capacity, and incremental technology upgrades alone are unlikely to substantially grow bit supply," he writes. "We believe the mixed demand outlook will keep industry supply in check. Our checks suggest competitors have failed to chip away SNDK’s leading position in TLC. SNDK’s cost advantage puts the company in an enviable

    position to protect margins and/or grow market share."

    SNDK this morning is up 94 cents, or 2.2%, to $43.74.

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